Lender NewDay targets buy now, pay later market with Newpay instant credit

Credit provider NewDay, which is plotting an imminent IPO, just launched a fresh instant-access checkout credit service designed to compete with the rising tide of buy now, pay later.

Called Newpay, the service is much like buy now, pay later in that it’s integrated into a retailer’s checkout with fixed 6, 12, 18 or 24 month payment options.

However, unlike BNPL, Newpay also includes a quick affordability check of customers, along with a fixed credit limit of up to £5,000 across the retailers they shop with.

NewDay, which also launched the Bip digital credit card earlier this year, is positioning Newpay as a safer alternative to buy now, pay later given it is regulated by the Financial Conduct Authority.

“Many unregulated Buy Now Pay Later providers offer products that require customers to make multiple payments across those plans each month,” said Ian Corfield, chief commercial officer at NewDay.

“With Newpay, we wanted to offer customers the ability to choose payment plans and timeframes that suit them, with customers paying just one amount each month, even if they have multiple payment plans in place across their purchases.”

While Newpay will be interest-free at selected retailers, by default customers will be charged a standard interest rate on the credit they use, typically at 21.9 per cent APR.

NewDay also boasts that because it is embracing the use of credit bureau data, Newpay also helps customers to build their credit scores, unlike several buy now, pay later providers who do not report data back to the bureaus.

“Newpay helps people to move forward with credit, provided that they remain within their credit limit and make their monthly payments on time,” added Corfield.